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Geothermal Heat Pump System for U.S. Residential Houses: Barriers of Implementation and Its Environmental and Economic Benefits

CSS Publication Number
Full Publication Date
August 28, 2014

Residential buildings account for 22 percent of the primary energy consumption in the U.S. Over half of this home energy requirement comes from heating and cooling demands. The geothermal heat pump (GHP) system can provide significant energy savings and greenhouse gas (GHG) abatement in homes with its high efficiency. However, despite its long history in the market, less than 0.5 percent of U.S. homes are utilizing GHP systems as of 2009. In this study, a model is developed to analyze the energy savings, GHG abatement, and energy bill savings potentials of the GHP in U.S. single-family detached houses and to identify major barriers for nation-wide implementation of the GHP system. Particularly, this study systematically pairs two national housing surveys to identify the house lot size, a key parameter that is not adequately addressed in other studies. This study estimates 1.26 quads of national energy savings, which is equivalent to 66 percent of energy savings from house heating and cooling, and 76 million tonCO2eq of GHG abatement every year. Moreover, this project identifies the major barriers as:(1) high cost premiums to homeowners, and (2) lack of available lots for ground loop. This study finds that about 21 percent of the sample houses cannot install the GHP system due to their small lots and about 61 percent of the sample houses will not fully recover the cost premium of the GHP system. The GHP system costs 9,855 dollars more than the equivalent conventional systems. An annual energy bill savings of 265 dollars with the GHP is not enough to financially justify the high cost premium for many homes. The average payback period is around 22 years under a 5 percent interest rate. A 30 percent federal tax credit reduces the percentage of houses that find the GHP system financially unattractive and sets the average payback period to 13.5 years. However, this payback period is still too long, meaning more aggressive policy is needed for a large scale GHP implementation.

Research Areas
Urban Systems and Built Environment
Geothermal Pump, Renewable Energy, Sustainable Energy
Publication Type
Master's Thesis
Digital Object Identifier
Full Citation
Lim, Tae. (2014) “Geothermal Heat Pump System for U.S. Residential Houses: Barriers of Implementation and Its Environmental and Economic Benefits.” Master's Thesis, University of Michigan: Ann Arbor 1-103.